Creating And Protecting Your Legacy

A few considerations when naming a special needs trustee

On Behalf of | Mar 12, 2020 | Estate Planning |

Medicaid, Supplemental Security Income and other needs-based government programs help individuals with special needs cover certain expenses. Unfortunately, though, a recipient may not use funds from these programs to pay other expenses that often improve quality of life. A special needs trust may be the solution. These trusts preserve a person’s eligibility for needs-based assistance while also giving him or her access to funds for supplemental expenses. 

If you have a friend or relative with special needs, you want to ensure he or she has the necessary financial resources to thrive. When setting up a special needs trust, however, you must be certain you designate the right trustee. Here are a few things to keep in mind. 

Subject-matter expertise 

You have quite a bit of latitude to designate virtually anyone you choose as the special needs trustee. Still, some individuals are a better fit than others. When naming one, you may want to think about subject-matter expertise. Specifically, the trustee should know enough about government assistance to not jeopardize the beneficiary’s eligibility. 

Record-keeping skills 

A special needs trustee has a fiduciary duty to carefully manage funds. To do so, the trustee must have some record-keeping skills. That is, you likely want to pick a trustee who can keep track of incoming and outgoing funds. Naming an independent trustee, such as a person who works at a financial institution, is possible. If you are uncomfortable going this route, you can designate co-trustees, naming a financial professional and another person to share the role. 

Communication talents 

Finally, special needs trustees often must have tough conversations with beneficiaries and other individuals. For example, they may need to discuss why an expenditure is inappropriate. As such, when designating a trustee for your special needs trust, you likely want to inquire about communication talents. At a minimum, you want someone who understands the importance of prompt and effective communication. 

For a variety of reasons, setting up a special needs trust may be an effective way to support your loved one. Nonetheless, the success of the trust likely depends on the trustee. With some effort, though, you can designate the perfect person for the job.